House OKs property tax rebate, but check’s not in mail

05/03/2006

Patricia Lopez, Star Tribune
Last update: May 02, 2006 – 11:46 PM

The Minnesota House passed a bill Tuesday that would send rebate checks to every homeowner in the state by October—but don’t spend that money yet.

The bill, which passed 86 to 47, has no companion in the Senate and many opponents among DFLers, who say the rebate is an election-year sop to voters that does not replace ongoing property tax relief.

Republicans called the rebate a responsible use of the $317 million that has piled up in the state’s tax relief account. “This is one-time money,” said House Taxes Chairman Phil Krinkie, R-Lino Lakes, who sponsored the bill. “Hello! One-time money. Don’t use it for anything ongoing.”

Court ruling a key

The bill would rebate homeowners a flat 9 percent of their 2006 property tax bill, with the highest-valued houses generating the largest rebates. Homeowners in the suburb of Deephaven would get rebate checks averaging $627, for example, while those in Austin would get checks averaging $73.

But even if the rebate proposal should somehow clear the Senate, its prospects remain iffy. It hinges on the outcome of an appeal to the state Supreme Court that will determine whether the state’s 75-cent-per-pack cigarette charge is legal or not.

The “Health Impact Fee,” devised by Gov. Tim Pawlenty, a Republican, as a way to break last year’s budget stalemate, was ruled unconstitutional by a lower court in December. If the Supreme Court upholds that decision, the state would have to pay back the millions in fees that it has collected since August and fill the $200 million-a-year budget hole that the ruling would create.

House Republicans have said the rebate would go into effect only if the state wins its appeal. Justices have not indicated when they will issue their decision.

Asked about the chances of the rebate becoming law, House Minority Leader Matt Entenza, DFL-St. Paul, replied, “Zero.”

House DFLers tried repeatedly Tuesday to replace lost aid to local governments but could not.

Rep. Keith Ellison, DFL-Minneapolis, said Minnesotans would not fall for a “gimmicky” rebate check that did nothing to replace lost services.

“If you throw a bucket of water on me and hand me a Kleenex, you’re not helping me,” Ellison said. “If you stick a knife in my back and pull it out one inch, you’re not helping me.”

He characterized Tuesday’s debate as an ideological contest between those who believed “government does matter, government does improve the lives of people,” and those who wanted to shrink government down so small “they could
drown it in the bathtub.”

Rebate for renters shot down

A DFL attempt to add renters to the rebate also failed by a vote of 66 to 67. Rep. Jim Davnie, DFL-Minneapolis, said it was unfair to shut out the state’s 270,000 renters, many of whom were low-income wage earners, seniors or disabled. The average renter’s rebate, he said, probably would amount to no more than $50.

Krinkie said the state already devoted an “enormous amount” to the renter’s credit. “There is no need for an additional rebate to renters,” he said.

Entenza compared the rebate checks with $100 gas rebate checks touted by some congressional Republican leaders. On Monday U.S. Sen. Norm Coleman, R-Minn., called the gas rebate “a little too cute and a little too meaningless.”